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Earth Businesses United States News

Oil Exploration Ramps Up In US Arctic 182

ananyo writes "A new round of exploratory oil drilling is due to begin in the Arctic this July. The oil giant Shell was granted permission some months ago by the U.S. government to drill two exploratory wells in the Beaufort Sea and three in the Chukchi Sea, both north of Alaska, this year — between 15 July and late September. The project is finally coming to fruition after years spent fighting legal challenges. It will be the first oil-exploration program to run in U.S. Arctic waters since 2000, and could mark the start of the first offshore commercial drilling in the American north, although it would take another decade to establish production wells."
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Oil Exploration Ramps Up In US Arctic

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  • Burn it (Score:2, Insightful)

    by Anonymous Coward

    Nothing changes until it is all gone.

  • Good (Score:4, Insightful)

    by Stumbles ( 602007 ) on Wednesday June 27, 2012 @02:19PM (#40470825)
    Good.
    • Re:Good (Score:5, Insightful)

      by i kan reed ( 749298 ) on Wednesday June 27, 2012 @02:46PM (#40471191) Homepage Journal

      Bad.

      I provided 1 trillion times the evidence and supporting reasoning of the parent. My post is better.

      • Re:Good (Score:5, Insightful)

        by Penguinisto ( 415985 ) on Wednesday June 27, 2012 @02:56PM (#40471345) Journal

        You both have it wrong. Here's how US public opinion on the matter actually works:

        Average gasoline prices under $3.75/gal? "Bad oil company! No drill! NO DRILL! bad! bad! bad!"

        Average gasoline prices over $4.50/gal? "I don't care if you have to line the well with baby seal fur and lubricate the rig with infant dolphin blood! Drill, damn you! DRILL!"

        • Chevron: We really don't care about the price of a barrel of oil one way or the other, except for those of us who have commodities futures in our portfolios. We've just successfully lobbied California to get the gas reformulated again so out of state gas can't compete in our private sandbox. Oh yeah, we'll be taking two of our refineries offline for preventive maintenance to celebrate this achievement.

        • by similar_name ( 1164087 ) on Wednesday June 27, 2012 @03:23PM (#40471657)
          What's interesting is that we're okay with $3.75/gal. 10 years ago $2 made people angry.
        • by mk1004 ( 2488060 )
          So obviously the goal of the oil companies would be to keep the price somewhere between $3.75/gal and $4.50/gal.
    • Re: (Score:3, Informative)

      Not good great!

      Living in Alaska gave me a different perspective. The oilpipeline is Alaska. What I mean by that is it funds natives(indians) to survive, pays for education, gives research money to conservation and global warming researching indirectorly by funding the U of Alaska system, brings in 20% of the population in Anchorage and so on.

      By 2016 the oil pipeline will be done! The state and its people will be devestated. Any oil they find needs to quickly be pipped to the oil pipeline. The oil industry i

  • This is news? (Score:5, Interesting)

    by ColdWetDog ( 752185 ) on Wednesday June 27, 2012 @02:22PM (#40470857) Homepage

    For techy people? Oh well, probably more topical that a fake severed head on a fake TV show.

    FWIW, Shell has drilled in the Arctic before - several other exploratory wells. They've done quite a bit of due diligence to mitigate problems including painting their disaster recovery ship a dark blue so as not to scare the whales.

    They realize quite perfectly if they have a major spill or blowout then the game is over. Further, there is no assurance that this will go anywhere beyond the exploratory wells - they may not find oil, they may not find much oil, it may cost too much to pull out.

    And if they wait long enough, the whole area may turn into a tropical paradise, much like it was when the algae, etc. that created the biomass that subsequently became oil was alive.

    • It sounds like you're trying to say "people are behaving responsibly to meet their goals with minimum damage" on a Slashdot article about a mix of environmentalism, technology, and politics... Your signature is wonderfully appropriate.
      • Re: (Score:3, Insightful)

        by ColdWetDog ( 752185 )

        This is likely to be the best scenario in a potential worst case scenario. Even if Shell doesn't drill in the Beaufort Sea, the Russians, Canadians, Danes and anybody else who can manage to plant a flag above the Arctic Circle will.

        We ARE going to Drill Baby, Drill until it costs too much to pull the stuff out of the ground. If we have any collective brains we will use that time to figure out how to power civilization using less environmentally disastrous methods. I'm not to sanguine about the collective

    • Re:This is news? (Score:5, Insightful)

      by d'baba ( 1134261 ) on Wednesday June 27, 2012 @02:37PM (#40471053)

      They realize quite perfectly if they have a major spill or blowout then the game is over.

      You mean like BP's game is over?
      ---
      Any conversation about a sufficiently complex subject is indistinguishable from babble.

      • It should be. They have an appalling safety record. Why anyone would sell them an oil lease is beyond me.

        • Money makes everything happen, its just that sometimes you just need a little extra money to get things moving.
        • by Kohath ( 38547 )

          Because oil is useful? Also, because a couple of years after "the worst thing that ever happened anywhere, ever" there's very little evidence any oil was spilled in the Gulf of Mexico at all. Incidents without lasting harm are easy to forget or disregard, as they should be.

        • Oh yeah it makes so much more sense for BP to be drilling in the gulf under Cuban rules and regulations.

      • You mean like BP's game is over?

        Good point, but keep in mind It would be over if people were to go elsewhere for gas.

        • Re: (Score:3, Informative)

          by Anonymous Coward

          Can't actually do that. Gas for a geographic area is usually supplied by the nearest refinery. Here in Denver all you can get is Conoco gas. I don't care where you go Shell, Wal Mart, Costco, Safeway, etc. you're getting Conoco gas. The only difference is the additives.

          Hooray for free market competition!

          • Gasoline is fungible. The pipeline operators are just optimizing the physical flow.

            Money flow follows entirely different patterns that reflect ownership.

      • Nope. BP had a spill on an established field. They get to pretend like nothing's wrong and continue on as before.

        Shell wants to start up a new field. They need permission, and they won't get it if they create a PR clusterfuck.

        Right? Wrong? Few care. It's politics.

    • "And if they wait long enough, the whole area may turn into a tropical paradise ..."

      You mean, like with a dramatic shift in the magnetic poles? Do you know something that the rest of us are not aware of, like perhaps being associated with the HAARP program?

      BTW, IIRC Shell Oil has had a number of less-than-stellar environmental issues in regions like Nigeria and Brazil. BP also had a reasonable environmental record, but only so long as their operations were located off-shore of a country that actually gave a

    • Re: (Score:3, Funny)

      by Anonymous Coward

      For techy people? Oh well, probably more topical that a fake severed head on a fake TV show.

      Hate to be pedantic* but it's certainly a real TV show. The content is fake, but the show really exists.

      * blatant lie, obviously

    • To be more precise, Shell has drilled several other dry exploratory wells...
  • So long, Arabia (Score:3, Interesting)

    by ch-chuck ( 9622 ) on Wednesday June 27, 2012 @02:26PM (#40470899) Homepage

    The sooner we decouple [wsj.com] from the Muslim extremists the better

    • Re:So long, Arabia (Score:4, Informative)

      by Anonymous Coward on Wednesday June 27, 2012 @02:37PM (#40471065)

      We buy most of our oil from Canada but oil is a global market, so this will only help drive down prices long term.

      If you buy any oil, you can't really say you are not buying or contributing anything to "Arab" countries, even if you only buy it from one place due to oil's global nature.

      • Re: (Score:2, Insightful)

        We buy most of our oil from Canada but oil is a global market, so this will only help drive down prices long term.

        If you buy any oil, you can't really say you are not buying or contributing anything to "Arab" countries, even if you only buy it from one place due to oil's global nature.

        This has nothing to do with lowing the price of oil, and everything to do with making the oil companies richer. They've proven that all it takes is to raise the prices $2 for a while until everyone is upset, and then drop it down a $1, and everyone is happy again. Kaching. $1 price increase and no one seems to care. The price of oil right now is based purely on the highest rate that the customer is willing to bear, and has little to nothing to do with availability.

        • Oil prices have everything to do with futures speculation and nothing to do with availability.
          • by Anonymous Coward on Wednesday June 27, 2012 @04:52PM (#40472531)

            And how did you figure that out? Wishing to the economist fairy that a non-renewable resource will instead last forever, production will never be less than demand (despite demand rising exponentially), and never go into permanent supply decline?

            Futures speculation affects short-term prices. Yes. But actual supply and demand affects long-term prices. Even OPEC learned this back in the 1970s when they artificially flattened supply increases, prices spiked during the oil crisis, the global economy crashed, demand correspondingly crashed, and then so did the prices despite OPEC desperately reducing supply. If OPEC couldn't artificially dictate whatever price they wanted back in the 1970s, what makes you think speculators can artificially set whatever price they like? Speculators can perturb the overall trend for a little while, and that's where they make their money, but the price is not disconnected from availability over the long term. On top of that, if prices rise sufficiently, demand empirically falls. If the economy does poorly, demand falls, and so do prices. This is not the signature of a system entirely controlled by speculation.

            Also, if supply wasn't ultimately a constraint, then you wouldn't have companies spending money to try to find oil in remote and/or deep-water and/or harsh Arctic environments where it easily costs 10x as much to drill and produce as it would on land closer to markets. They're drilling here because the conventional/cheap supplies are dwindling away. They're drilling here because they have no other choice if they want to maintain production levels. If that's not a sign of a real issue with regards to availability, I don't know what could convince you. Why spend 10x as much for a barrel of oil there if, supposedly, they could get all the oil they wanted from somewhere else cheaper?

            We're genuinely in the bottom half of the barrel.

          • Uhu., and what speculations are they making to determine the price, future supply/demand perchance? I remeber reading a SciAM article back in the day you had to go to a news stand (~1990). It investigated sources of oil and projected prices, they suggested that by 2010 oil would be $100/b and oil companies would be digging up tar sands.
        • The price of oil right now is based purely on the highest rate that the customer is willing to bear, and has little to nothing to do with availability.

          That sounds exactly like the market determining the price. of course you charge as much as the market will bear - you'd be an idiot not to.

          Especially when you are selling something of fixed supply.

          You have X barrels of oil available to be pumped out of the ground, as supply dwindles price will rise so you want to sell as little as possible now and as much as

  • by DavidHumus ( 725117 ) on Wednesday June 27, 2012 @03:05PM (#40471429)

    The Economist has a funny quote in their article -http://www.economist.com/node/21556800 - on how faster-than-expected warming in the Arctic will open up previously inaccessible resources:

    "Oil companies are reluctant to admit that climate change plays a part in their northward shift. They do not want to be seen to be profiting from the environmental damage to which their activities have contributed."

    • Heh, yeah, they are pretty much placing their bets on the ice-free summer arctic within the next couple of years with this.
      • Nothing to worry about. The Heartland Institute has their backs. They can safely ruin the environment while the Heartland Institute and like-minded organizations go around teaching school children that God wants us to puke CO2 into the atmosphere and that nothing can possibly go wrong with it.

      • by hey! ( 33014 ) on Wednesday June 27, 2012 @04:09PM (#40472149) Homepage Journal

        They're not the only ones. Russia has also been making noises about creative interpretation of the international law rules about territorial waters. The UN Convention on the Law of the Seas (which the US has signed but not ratified) allows countries to measure their territorial waters and exclusive economic zone from the edge of the continental shelf rather than from land. Russia has claimed that a undersea mountain range crossing over the North Pole is part of the East Siberian Shelf, which if allowed gives them sovereignty over the North Pole and exclusive economic control over a vast swath of the Arctic Ocean running from Komsomolets Island to almost Greenland.

        With about equal justification, Denmark has argued that the same range is an extension of Greenland, and Canada that it is an extension of North America. Russia has already sent a deep submersible to plant the Russian flag at the North Pole. If there are significant resources found in an ice-free region of what is now international waters, we could well see a serious conflict develop as each claimant seeks to control who gets to extract those resources.

        This business of allowing territorial claims out to the continental shelf is insane, and very dangerous.

  • by gestalt_n_pepper ( 991155 ) on Wednesday June 27, 2012 @03:54PM (#40471985)

    They're desperate, as they should be. There's less then 40 years of conventional oil at current usage rates. Far more importantly, the remaining oil is going to have declining energy return all the way to the bottom. If the oil companies can put the days of reckoning off for five more years, they've done well for themselves, and we have that much longer before people start starving.

  • by cant_get_a_good_nick ( 172131 ) on Wednesday June 27, 2012 @04:02PM (#40472063)

    Oil Guy: Do you find it ironic that we denounce global warming, but use higher temps and lower ice mass to get more oil for more Carbon emissions?

    Tobacco Guy: no, not at all.

    • by Jeremi ( 14640 )

      Oil Guy: Do you find it ironic that we denounce global warming, but use higher temps and lower ice mass to get more oil for more Carbon emissions?

      Tobacco Guy: no, not at all.

      It's funny you should mention tobacco... every time I hear about the push to drill in the (newly ice-free) Arctic, this [abcnews.com] image (of the cancer victim who has figured out that his newly installed throat-hole makes a fine nicotine delivery mechanism) is what comes to mind.

  • by peter303 ( 12292 ) on Wednesday June 27, 2012 @04:09PM (#40472145)
    I heard [popularmechanics.com] below 20% capacity or about 400,000 barrels a day it can become unsafe to operate in the winter. Its down to about 500,000 now.

    I drove along the pipeline road from Valdez to Fairbanks 6 years ago. Its an amazing thing to see,
    • you're not thinking fourth dimensinally, Marty. why use a pipe when we can have caravans of supertankers burning #2 bunker oil? That makes demand even higher, and drives up shareholder and executive satisfaction.

  • "...and could mark the start of the first offshore commercial drilling in the American north, although it would take another decade to establish production wells."

    Thats the real problem right there. In 10 years it might not even be needed with how fast technology advances.

  • Obama, the Republican's Democrat...

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